Alpha Metallurgical Resources, Inc. (AMR)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and six months ended June 30, 2026 and 2025. The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our Consolidated Financial Statements and related notes and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025.

The following discussion includes forward-looking statements about our business, financial condition and results of operations, including discussions about management’s expectations for our business. These statements represent projections, beliefs and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse. See “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.”

Market Overview

Over the course of the second quarter, metallurgical coal markets were subdued. Continued uncertainty and volatility resulting from the war in Iran and broader global economic conditions influenced markets. The historically wider-than-normal spreads between Australian-linked low vol and U.S. East Coast low vol persisted. A further significant pricing gap between low vol and high vol coals also remains.

In the second quarter of 2026, metallurgical coal prices experienced limited movements across the indices. Of the four indices Alpha closely monitors, the Australian Premium Low Volatile index represents the largest percentage move, with a 2.8% increase over the quarter. The Australian Premium Low Volatile index increased from $236.80 per metric ton on April 1, 2026, to $243.50 per metric ton on June 30, 2026. The U.S. East Coast Low Volatile index fell from $195.00 per metric ton at the beginning of the quarter to $190.00 per metric ton at the quarter’s close. The U.S. East Coast High Volatile A index decreased from $159.50 per metric ton in early April to $157.00 per metric ton by the end of June, and the U.S. East Coast High Volatile B index decreased from $149.50 per metric ton to $147.00 per metric ton at the end of the quarter. Since the quarter close, the Australian Premium Low Volatile has decreased to $222.00 per metric ton as of July 22, 2026. The U.S. East Coast Low Volatile, High Volatile A, and High Volatile B indices measured $189.50, $157.00, and $147.00 per ton, respectively, as of the same date.

The world manufacturing Purchasing Managers’ Index (“PMI”) registered a June PMI of 52.2, a decrease from May’s 50-month high of 52.7. China’s June PMI posted a 3-month low of 51.7, down slightly from 51.8 in May. India, a key market for Alpha, recorded a PMI of 54.2 in June, a decline from May’s 55.0. The United States’ June PMI fell to 53.9 from its May PMI of 55.1. Europe’s PMI measured a 4-month low of 51.4 in June, down from 51.6 in May. Brazil’s PMI increased above the 50.0 neutral mark in June at 50.8, up from May’s PMI of 49.1.

The June 2026 global crude steel production of 155.7 million metric tons from 70 countries, as reported by the World Steel Association (“WSA”), represents an increase of 1.7% from June 2025. China, the world’s largest steel-producing country, produced 83.7 million metric tons in June, an increase of 0.4% compared to the same period in 2025. India experienced an increase of 4.5% year-over-year, with 14.1 million metric tons of steel produced in June 2026. The United States produced 7.2 million metric tons of crude steel in June, up 3.5% from June 2025. Japan’s 6.8 million metric tons of steel produced in June 2026 represents a 1.3% increase from June 2025. Of the top 10 steel-producing countries, Vietnam experienced the largest year-over-year percentage increase of 27.5%, with 2.6 million metric tons of steel produced in June 2026. Russia recorded the largest percentage drop among the top ten steel-producing countries, as its 5.6 million metric tons of steel produced in June 2026 represents 3.4% less than it produced a year ago. Regionally, the Asia and Oceania region, which contains both India and China, produced 115.2 million metric tons of crude steel in June 2026, a 1.5% increase from June 2025. The European Union produced 10.8 million metric tons of steel in June, representing a 4.6% increase year-over-year. North America’s June 2026 crude steel production was 9.5 million metric tons, up 5.0% compared to the same period last year.

The American Iron and Steel Institute’s capacity utilization rate for U.S. steel mills was 79.3% for the week ending July 18, 2026. This is up in comparison to the year-ago period when the capacity utilization rate was 78.2%.

In the seaborne thermal market, the API2 index was $117.80 per metric ton on April 1, 2026, and decreased to $115.65 per metric ton on June 30, 2026.

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Business Overview

We are a Tennessee-based mining company with operations in Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, we are a leading supplier of metallurgical coal products to the steel industry. We operate high-quality, cost-competitive met coal mines across the CAPP coal basin. As of June 30, 2026, our operations consisted of twenty-one active mines and eight active coal preparation and load-out facilities, with approximately 3,950 employees. We produce, process, and sell met coal and thermal coal as a byproduct. We also sell coal produced by others, some of which is processed and/or blended with coal produced from our mines prior to resale, with the remainder purchased for resale. As of December 31, 2025, we had 294.5 million tons of reserves, which included 282.8 million tons of proven and probable metallurgical reserves and 11.7 million tons of proven and probable thermal reserves.

Purchases of our met coal were made primarily in several countries in Asia, Europe, South America, and the northeastern and midwestern regions of the United States for purposes of steel production. Purchases of our thermal coal were made primarily for purposes of power generation and industrial uses both in the United States and across the world.

The following table summarizes information about our coal sales and export revenues during the three and six months ended June 30, 2026 and 2025:

In addition, we generate other revenues from equipment sales, rentals, terminal and processing fees, coal and environmental analysis fees, royalties and the sale of natural gas. We also record freight and handling fulfillment revenue within coal revenues for freight and handling services provided in delivering coal to certain customers, which are a component of the contractual selling price.

As of June 30, 2026, we have one reportable segment: Met. Refer to Note 15 to the Condensed Consolidated Financial Statements for additional disclosures on reportable segments, geographic areas, and export coal revenue information.

As discussed in the “Market Overview” presented above, global economic conditions and uncertainty driven by geopolitical unrest are influencing factors in the metallurgical coal markets. Met coal prices continue to be restrained by weak global steel demand. Our results of operations for the three and six months ended June 30, 2026 were impacted by these factors. Our guidance range for full-year sales volumes below reflects our current expectation for 2026. However, we continually monitor steel markets and metallurgical coal demand indicators and have the ability to adjust production levels to align with market conditions. Additionally, refer to “Liquidity and Capital Resources - Business Updates” for developments regarding a key piece of equipment, a stacker reclaimer machine at Dominion Terminal Associates (“DTA”), which sustained significant damage due to high winds from a storm as previously announced in June 2026.

Factors Affecting Our Results of Operations

Sales Agreements. We manage our commodity price risk for coal sales through the use of coal supply agreements. As of July 30, 2026, we had sales commitments for 2026 as follows:

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(1)     Based on committed and priced coal shipments as of July 30, 2026. Committed percentage based on the midpoint of shipment guidance range. Actual average per-ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations. Includes estimates of future coal shipments based upon contract terms and anticipated delivery schedules. Actual coal shipments may vary from these estimates.

Realized Pricing. Our realized price per ton of coal is influenced by many factors that vary by region, including (i) coal quality, which includes energy (heat content), sulfur, ash, volatile matter and moisture content; (ii) differences in market conventions concerning transportation costs and volume measurement; and (iii) regional supply and demand.

Costs. Our results of operations are dependent upon our ability to maximize productivity and control costs. Our primary expenses are for operating supply costs, repair and maintenance expenditures, costs of purchased coal, royalties, wages and benefits, freight and handling costs and taxes incurred in selling our coal. The principal goods and services we use in our operations include maintenance and repair parts and services, electricity, fuel, roof control and support items, explosives, tires, conveyance structures, ventilation supplies and lubricants. Our management strives to aggressively control costs and improve operating performance to mitigate external cost pressures. We experience volatility in operating costs related to fuel, explosives, steel, tires, contract services and healthcare, among others, and take measures to mitigate the increases in these costs at all operations. We have a centralized sourcing group for major supplier contract negotiation and administration, for the negotiation and purchase of major capital goods, and to support the business units. We promote competition between suppliers and seek to develop relationships with suppliers that focus on lowering our costs. We seek suppliers who identify and concen

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides a narrative of our results of operations and financial condition for the years ended December 31, 2025 and 2024. The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes and the risk factors included elsewhere in this Annual Report on Form 10-K. For discussion on results of operations and financial condition pertaining to 2023 and year-over-year comparisons between 2024 and 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

The following discussion includes forward-looking statements about our business, financial condition and results of operations, including discussions about management’s expectations for our business. These statements represent projections, beliefs and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse. Refer to “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.”

Market Overview

Supply-related issues, including December 2025 and January 2026 flooding in Queensland, Australia, impacted metallurgical markets in recent months. Due to constraints on Australian met coal supply, a divergence between the Australian-linked indices and the U.S. East Coast markets significantly expanded, with spreads also widening between the premium grade low vol. coal and lower quality high vol. coals. Despite supply-related moves like these, the global metallurgical coal markets are still structurally influenced by steel demand, which is linked to economic conditions, policy decisions, geopolitical tensions, tariffs and ongoing trade negotiations, all of which could impact met coal pricing.

Metallurgical coal prices experienced varied movements across the indices during the fourth quarter of 2025. Of the four indices Alpha closely monitors, the Australian Premium Low Volatile index represents the largest move, an increase of 14.6%. The Australian Premium Low Volatile index increased from $190.20 per metric ton on October 1, 2025, to $218.00 per metric ton on December 31, 2025. The U.S. East Coast Low Volatile index rose from $177.00 per metric ton in October to $185.00 per metric ton by the end of December, an increase of 4.5%. By contrast, the U.S. East Coast High Volatile A index fell from $152.50 per metric ton at the beginning of the quarter to $150.50 per metric ton at the end of the quarter, and the U.S. East Coast High Volatile B index decreased from $144.50 per metric ton to $144.20 per metric ton at the quarter’s close. Since then, all four indices have increased from their end-of-quarter levels. As of February 16, 2026, the Australian Premium Low Volatile increased to $242.50 per metric ton from its quarter-close level. The U.S. East Coast Low Volatile, High Volatile A, and High Volatile B indices measured $198.00, $160.00, and $150.00 per ton, respectively, as of the same date.

The world manufacturing Purchasing Managers’ Index (“PMI”) recorded a three-month high in January with a PMI of 50.9, up from December’s PMI of 50.4. China’s PMI moved slightly higher from 50.1 in December to 50.3 in January. India, an important market for Alpha, had a PMI of 55.4 in January, up from December’s two-year low of 55.0. The United States’ PMI rose to 52.4 in January from its December level of 51.8. Europe’s January PMI was 49.5, an increase from a nine-month low of 48.8 in December. Brazil’s manufacturing sector PMI was 47.0 in January, a decrease from December’s PMI of 47.6.

As compiled by the World Steel Association (“WSA”), global crude steel production in December 2025 reached 139.6 million metric tons from 70 countries, representing a 3.7% decrease compared to December 2024. The world’s largest steel-producing country, China, recorded the largest percentage decline of the top ten steel-producing countries, with its December 2025 production of 68.2 million metric tons, representing a 10.3% decrease year-over-year. The next largest producer, India, recorded 14.8 million metric tons in December 2025, up 10.1% from its December 2024 level. The United States produced 6.9 million metric tons of crude steel in December, representing a 3.6% increase from December 2024. Japan’s 6.6 million metric tons of steel produced in December 2025 was down 4.8% year-over-year. Of the top 10 steel-producing countries, Turkey experienced the largest year-over-year percentage increase, at 18.5%, with 3.5 million metric tons of steel produced in December. Regionally, the Asia and Oceania region, which contains both India and China, produced 99.7 million metric tons of crude steel in December 2025, a 6.3% decrease from December 2024. The European Union produced 9.9 million metric tons in December, representing a 3.9% increase compared to the same period last year. North America’s December 2025 crude steel production was 9.0 million metric tons, down 0.4% from the December 2024 level.

The American Iron and Steel Institute’s capacity utilization rate for U.S. steel mills was 77.8% for the week ending February 14, 2026. This is up from the year-ago period when the capacity utilization rate was 76.5%.

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In the seaborne thermal market, the API2 index was $94.55 per metric ton as of October 1, 2025, and increased to $96.90 per metric ton on December 31, 2025.

Business Overview

We are a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, we are a leading supplier of metallurgical coal products to the steel industry. We operate high-quality, cost-competitive coal mines across the CAPP coal basin. As of December 31, 2025, our operations consisted of nineteen active mines and eight active coal preparation and load-out facilities, with approximately 3,960 employees. We produce, process, and sell met coal and thermal coal. We also sell coal produced by others, some of which is processed and/or blended with coal produced from our mines prior to resale, with the remainder purchased for resale. As of December 31, 2025, we had 294.5 million tons of reserves, which included 282.8 million tons of proven and probable metallurgical reserves and 11.7 million tons of proven and probable thermal reserves.

We began operations on July 26, 2016, with mining operations in NAPP, CAPP, and the PRB. Through the Acquisition, we acquired a significant reserve base. We also acquired Alpha Natural Resources Inc.’s 40.6% interest in the DTA coal export terminal in Newport News, Virginia, and on March 31, 2017, we acquired a portion of another partner’s ownership stake and increased our interest to 65.0%. We merged with Alpha Natural Resources Holdings, Inc. and ANR, Inc. on November 9, 2018.

On December 10, 2020, we closed on a transaction with Iron Senergy Holdings, LLC, to sell our thermal coal mining operations located in Pennsylvania consisting primarily of our Cumberland mining complex and related property (our former NAPP operations). This transaction accelerated our strategic exit from thermal coal production to shift our focus to met coal production.

For the years ended December 31, 2025 and 2024, sales of met coal were 14.1 million tons and 15.9 million tons, respectively, and accounted for approximately 93% and 93%, respectively, of our coal sales volume. Sales of thermal coal were 1.2 million tons and 1.2 million tons, respectively, and accounted for approximately 7% and 7%, respectively, of our coal sales volume.

Our sales of met coal were made primarily in several countries in Asia, Europe, and the Americas and to steel companies in the northeastern and midwestern regions of the United States. Our sales of thermal coal were made primarily to large utilities and industrial customers both in the United States and across the world. For the years ended December 31, 2025 and 2024 approximately 73% and 78%, respectively, of our coal revenues were derived from coal sales made to customers outside the United States.

In addition, we generate other revenues from equipment sales, rentals, terminal and processing fees, coal and environmental analysis fees, royalties and the sale of natural gas. We also record freight and handling fulfillment revenue within coal revenues for freight and handling services provided in delivering coal to certain customers, which are a component of the contractual selling price.

As of December 31, 2025, we have one reportable operating segment: Met. Refer to Notes 21 and 22 to the Consolidated Financial Statements for additional disclosures on our reportable segment, geographic areas, and export coal revenue information.

As discussed in the “Market Overview” presented above, metallurgical coal prices remain at lower levels than in recent years due to weak global steel demand which has been influenced by a slowdown in manufacturing activity. Economic pressures, geopolitical uncertainty, and shifting trade policies have contributed to metallurgical market challenges. Our results of operations for the year ended December 31, 2025 were impacted by these factors.

Recent Business Developments

In 2025, due to continued softness in the met coal pricing environment, especially for U.S. High-Vol. products driven by weak global steel demand combined with additional U.S. High-Vol. production, we reduced production levels at our Jerry Fork and Black Eagle mines within our Power Mountain and Marfork mining complexes, respectively, and temporarily idled our Long Branch surface mine within our McClure/Toms Creek mining complex.

In 2024, we began the development phase for our new Kingston Wildcat underground mine located in Fayette County, West Virginia. The mine, which will produce a Low-Vol. quality met coal, is expected to begin production in the first quarter of

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2026.

In 2023, we completed development of and commenced production at our Rolling Thunder and Checkmate Powellton mines within our Power Mountain and Elk Run mining complexes, respectively, which produce High-Vol. B quality met coal from the Powellton coal seam.

In the first quarter of 2023, we completed a series of transactions to acquire a number of coal trucks and related equipment and facilities to secure trucking services for our operations. In December 2022, we purchased substantially all of the assets of a mining equipment component manufacturing and rebuild business to help secure the supply of certain underground mining equipment parts needed for our operations.

Factors Affecting Our Results of Operations

Sales Agreements. We manage our commodity price risk for coal sales through the use of coal supply agreements. As of February 17, 2026, we had sales commitments for 2026 as follows:

(1)     Based

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